Apple to account for higher share of Pegatron revenues

Staff writer, with CNA

Pegatron Corp (和碩), an assembler of Apple Inc’s iPhone and iPad, is likely to see orders from the US technology giant account for a higher share of its revenue this year because of the expected launch of new Apple products, a Japanese brokerage said yesterday.

Nomura Holdings Inc raised its rating on Pegatron shares from “neutral” to “buy” with a target price of NT$53, citing an expected increase in the company’s margins and strong growth in its Apple business.

“We expect Pegatron to begin manufacturing Apple’s new iPhone model in June or July and Pegatron should continue to be a major producer of the next generation of the iPad mini in 2013,” Nomura analyst Eve Jung (戎宜蘋) wrote in a research report.

She estimated that Pegatron would supply 60 percent and 24 percent of Apple’s iPad minis and iPhones respectively this year.

As a result, Apple could account for about half of Pegatron’s revenue this year, up from 35 percent last year, Jung said.

Pegatron shares gained 3.41 percent to close at NT$40.90 yesterday in Taipei trading. The shares have risen 2.38 percent over the past 12 months.

The Chinese-language Commercial Times newspaper reported yesterday that Pegatron is set begin pilot production for a low-cost version of the iPhone in May, before Apple’s new products hit the market in the third quarter.

Pegatron is forecast to ship about 40 million units of the planned low-cost iPhone, which could sell for as little as US$350 by being cased in plastic, the report said.

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